I remember Larry and Steve from a LONG time ago. One of the better Cartoon Cartoons way back when too. Back then CN had a lot of good shows and even more good ideas. Though if it wasn't pointed out I doubt I'd ever have made the connection.

The character designs and characterizations for Steve and Larry leave me with the feeling Seth McFarlane was watching a lot of Wallace & Gromit before he "dreamt up" his new series.

Also, it surprises me that Family Guy hasn't made any jokes about this, since obscure gags about their own pilot would seem to be right up their alley. Maybe Cartoon Network owns the rights to "Larry and Steve", hence the character design and name changes for Family Guy.